Canadian Oil Sands Will Defend Shareholders from Substantially Undervalued, Opportunistic and Exploitive Suncor Bid

Canadian Oil Sands Limited announces it will continue to defend shareholders and the protections put in place in its Shareholder Rights Plan in response to Suncor Energy Inc.'s ("Suncor") hostile take-over bid.

In light of the imbalance of information between Suncor on the one hand and COS shareholders and other potential bidders on the other, the Shareholder Rights Plan provides the Board with the time and flexibility needed to act in the best interests of shareholders and maximize value.

"Suncor has made a bid that is substantially undervalued, obviously opportunistic, and exploitive. Now it is trying to force COS shareholders to act in haste and against their best interests before the market and shareholders have access to the same information Suncor has about Syncrude," said Donald Lowry, Chairman of Canadian Oil Sands. "Our shareholders have told us they are against this substantially undervalued bid and that the timeframe of our Rights Plan is appropriate and fair to them."

Suncor's decision to challenge the Shareholder Rights Plan further reinforces the self-interested, opportunistic nature of their hostile bid on the following basis:

1. Suncor took unfair advantage of its position as a co-owner of the Syncrude Joint Venture by relying on undisclosed information relating to Syncrude. Suncor formulated its offer to take advantage of COS shareholders by deliberately timing its bid to expire prior to the time that COS would be expected to publicly disclose information on Syncrude's 2016 budget and cash conservation initiatives. Suncor knows that these disclosures are necessary for COS shareholders to evaluate Suncor's offer and for the market to assess alternative bids.
2. Suncor is trying to use a period of uncertainty to their advantage and at the expense of shareholders. The Suncor bid was launched in an environment of historically low and volatile oil prices, significant political, economic and industry uncertainty, and ongoing review of royalty and environmental considerations of particular relevance to COS. The Suncor bid was highly opportunistic since it was deliberately timed to take advantage of these uncertainties. The challenge is an exploitive attempt to speed their substantially undervalued bid through before any clarity can be applied to these issues.
3. Suncor's own actions demonstrate there is no need for urgency. Suncor took more than six months from the below-market proposal in the spring to present a lower formal offer, without any notice, and are giving shareholders only 60 days to respond. Suncor is not prejudiced by the Rights Plan; its bid is already highly conditional and, as an all stock offer, entails no financing costs. Additionally, Suncor would be aware that previous sales of smaller interests in Syncrude took several months.

Ryan Kubik, CEO of Canadian Oil Sands added: "Make no mistake, we will defend our shareholders' rights. Suncor's application is simply a smokescreen intended to obscure the weakness of its offer and its attempt to complete the bid before COS can share important and encouraging information from Syncrude. As an insider of Syncrude, Suncor knows that news is coming. It knows royalty and environmental changes are coming to the industry. It knows changes are coming to takeover regulations. And it knows COS has strategic interests in a valuable asset so it is trying to limit the ability of the COS Board to pursue and consider strategic alternatives for the benefit of COS shareholders."